Red Sea crisis raises alarm for Pakistan as Houthi threats hit Saudi oil tankers

Saudi crude exports through the Red Sea have dropped sharply after Houthi maritime threats revived concerns over Bab Al Mandeb, increasing pressure on global oil markets and shipping.

WEBDESK – MEDIABITES

Saudi Arabia’s crude oil shipments through the Bab Al Mandeb Strait have fallen by 36% in just two weeks as renewed threats from Yemen’s Houthi movement disrupt one of the world’s most important maritime trade routes, according to shipping analytics firm Kpler.

Weekly crude loadings from Saudi Arabia’s Red Sea terminals declined to 6.1 million barrels per day during the week ending July 13, down from a peak of 9.5 million barrels per day on June 29, reflecting growing concerns over security in the region. West coast exports dropped to 2.79 million barrels per day from 4.23 million, while shipments bound for Asia fell to 3.32 million barrels per day from 5.30 million.

The decline follows the Houthis’ declaration of a maritime embargo against Saudi Arabia, which the Iran-backed group said was in response to a Saudi strike on Sanaa airport and what it described as a decade-long blockade of Yemen.

Saudi alternative route under pressure

Saudi Arabia has increasingly relied on its Red Sea export facilities at Yanbu after Iranian actions effectively closed the Strait of Hormuz earlier this year, making the Bab Al Mandeb Strait a critical alternative route for crude exports.

Energy analysts warn that renewed instability now threatens both of the Gulf region’s key oil export corridors.

Homayoun Falakshahi, head of crude analysis at Kpler, said oil flows through the Bab Al Mandeb had already declined by more than 1.2 million barrels per day as shipping companies reassessed risks in the region.

Neil Quilliam, an associate fellow at Chatham House, described the Houthi embargo as the most serious deterioration in relations between Riyadh and the group since an informal truce took hold in April 2022.

He said the Houthis appear prepared to expand the conflict beyond Yemen into the Red Sea’s maritime domain, potentially threatening Saudi Arabia’s alternative export routes and increasing shipping and insurance costs.

Global trade faces fresh uncertainty

The Bab Al Mandeb Strait handles around 12% of global trade and roughly one-quarter of the world’s container traffic, making it one of the most strategically important maritime chokepoints.

According to the U.S. Energy Information Administration, oil flows through the passage averaged 9.3 million barrels per day in 2023 before Houthi attacks reduced volumes significantly over the following two years. Shipments had only recently begun recovering before the latest escalation.

Analysts warn that simultaneous disruption at both the Strait of Hormuz and Bab Al Mandeb could jeopardize nearly one-quarter of global oil and gas supplies while severely affecting Asia-Europe shipping routes.

Andreas Krieg of King’s College London said closure of both waterways would effectively place Saudi Arabia under “strategic siege,” forcing vessels to take longer voyages around Africa and increasing costs for global trade.

Shipping industry remains cautious

The shipping sector continues to feel the effects of the Houthis’ previous Red Sea campaign, during which more than 100 commercial vessels were attacked, several ships were sunk or seized, and major shipping companies rerouted traffic away from the Suez Canal.

Industry experts say even limited attacks or threats are enough to alter commercial shipping patterns, prompting higher insurance premiums and longer transit times.

Although it remains unclear how the Houthis intend to enforce their latest maritime embargo, markets are already factoring in the heightened security risks as tensions across the Middle East continue to escalate.